A recent EU-funded report hints that new Member States, such as the Czech Republic and Latvia, may outperform the UK and France in the service sector. However, researchers point out that it may be an indication that new members are simply playing catch-up.
The 2006 TrendChart report: “Can we measure and compare
innovation in services?”, conducted by researchers at
UNU-MERIT, a joint research centre of United Nations University
and Maastricht University and funded by DG Enterprise, took
a look at current methods of evaluating innovation to see if
they are applicable to the services sector.
|Services in Eastern Europe score high on new SSII index.|
© Jan Tik
Their results suggest that is difficult to apply traditional innovation indicators to the services sector, and even harder to compare results across borders.
Typical indicators used by researches to measure innovation include total number of patents, total innovation expenditures and innovation sales shares, all of which were originally designed to assess technical innovation in the manufacturing sector.
To better understand innovation in services, authors of this
year's TrendChart report developed the Service Sector
Innovation Index (SSII), an indicator comprised of a combination
of 24 other indicators, 22 of which are taken from the 3rd Community
Innovation Survey, and divided into seven themes: human resources,
innovation demand, technological knowledge, non-technological
changes, sources of knowledge, commercialisation, and intellectual
They discovered that though some new Member States performed well on the SSII, it may be a bit premature to draw generalisations. They noted that a high score on the SSII does not necessarily mean that a country is particularly innovative in the services sector, but rather that those countries may be making advancements that other countries have already completed.
For example, Denmark, Austria and the Netherlands, countries that have done well on the European Innovation Scoreboard (EIS) survey that studies innovation across all sectors, scored low on the SSII. The authors suggest that this reflects a fundamental difference in innovation in the services sector as opposed to others.
They point out that the learning curve is not very steep for companies in the services sector compared with manufacturing, for example. It is relatively easy for companies to rapidly move towards best practice. There is much less room for innovation for companies in counties with a highly developed services sector because they are already near the limit of best practice.
The results of the survey will prove useful to the recently
established Commission-backed expert group designed to help
Member States improve service sector innovation. The expert
group, which began work in last month, will also aid in the
development of the pan-European platform to better link universities,
entrepreneurship and finance, in order to foster innovative
start-ups in the services sector. The platform was announced
in the Commission's recent Communication on Innovation:
Putting knowledge into practice: a broad-based innovation strategy
for the EU.